Category Archives: Economic Analysis

Unique Period of Bond Yield Volatility a Result of Constant Portfolio Rebalancing

Posted on May 4, 2013 by Michael Harris

The 10-year Note yield rose 7.4% yesterday as managers were rebalancing their portfolios to reflect new information about the state of the economy and the objectives of the FED. This is a high level of daily volatility in bond yields and a phenomenon … Continue reading →

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Buying US stocks and Selling Emerging Market Stocks May Continue

Posted on April 19, 2013 by Michael Harris

Why is everyone buying US stocks and selling emerging market stocks? The Vanguard FTSE Emerging Markets ETF (VWO) has declined 6.53% while SPY has risen 8.24%, as of the close of yesterday and based on the close of last year. The main … Continue reading →

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Anti-Correlation Between Stocks and Bonds is Still High

Posted on April 1, 2013 by Michael Harris

The 12o-day rolling correlation between stocks and bonds made a low of -0.81 during February of 2012 and since then its has risen to slightly higher levels around -0.66. However, the correlation is still low and despite the correction due to a rise … Continue reading →

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ETF Correlations as of the Close of Thursday, March 28, 2013

Posted on March 30, 2013 by Michael Harris

Rolling 60-day correlations of SPY with TLT, FXE, GLD, SLV, USO and DBC, and trends developing since the last report on March 15, 2013. The correlation between stocks and commodities is on the rise again as the effects of financialization are becoming more pronounced … Continue reading →

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EURUSD at a Crucial Support Area

Posted on March 26, 2013 by Michael Harris

The euro is feeling the pressure of the political decision in EU to recapitalize banks using depositor money. According to some analysts, what happened in Cyprus was only an experiment for EU politicians to see how that could work in practice. The … Continue reading →

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What Currency War? Give Me a Break

Posted on February 22, 2013 by Michael Harris

I have seen several articles recently about a currency war that is taking place.  It sounds like some are ignorant of the past. The last 3 years  have been a stable period in the forex market. Just take a look at the … Continue reading →

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The Countdown for the Privatization of Apple Inc. May Have Just Begun

Posted on January 24, 2013 by Michael Harris

It may take a few years but eventually Apple Inc. may become a private company. Apple has a lot of cash, no debt and it is 68% owned by institutions. Those who will own Apple in the future will become major players in … Continue reading →

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Bond Bears Are Ready to Give Up

Posted on November 27, 2012 by Michael Harris

This probably means that a bond bear market is coming closer because even big names in the investment industry seem to have given up and are adding to their bond portfolios. However, a rapid rise in yields will not affect pension … Continue reading →

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The Fallacy of Rare Events and Fat Tails

Posted on October 21, 2012 by Michael Harris

Rare events such as the 1987 stock market crash or the Google stock drop of last Friday are unpredictable. Those who try to convince investors and traders to constantly plan for such events essentially attempt to neutralize them and turn them into spectators … Continue reading →

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The Probability of a Market Trend Reversal is Now Higher

Posted on October 5, 2012 by Michael Harris

Market indices are facing strong overhead resistance in their effort to defy gravity and move higher. Fueled by talks of infinite QE, the market has overlooked other sources of potential risks, like Europe for example. The situation in Europe is getting … Continue reading →

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